What is your plan B when tragedy strikes your SME?
Recently, a key team member of one of our clients suffered a heart attack. Thankfully, they are now making a full recovery after an extensive stay in hospital. The loss of any team member impacts immediately on the daily operation of a SME however a longer absence could affect the ongoing running and viability of the business.
Like most SMEs, our client ran their successful business with only a handful of personnel. Their bookkeeping/financial controller solely looked after the MYOB file data entries, reconciled the accounts and ensured that all transactions were taken up correctly. She also liaised with Harveys to prepare quarterly financial reports for the Board meetings. This was a seamless process for the past two years however, last January tragedy struck. The financial controller suffered a heart attack and was away from the office recovering for an extensive period of time.
The reliance of most small businesses on key personnel is inevitable and the risk great. In this instance no one else in the organisation had a clear view of the entities performance, no one could produce the reports for the Directors meeting and nobody had access to the MYOB files.
Obviously, Harveys provided help and the directors received some assistance from other team members but valuable time and energy was spent on sorting out the financials.
So what is the take out from this Case Study? Could this happen to your business?
Key personnel do get sick or leave however; systems can be put into place to negate the impact to management and the business.
One solution is to implement Cloud Accounting which allows access to real time, live data and changes to files can be made at anytime by a nominated person including your accountant.
If you are already on the cloud, it is an easy process to allow Harveys’ access to your files so they can help you to manage your accounts in case of an emergency. This will allow directors, who are actively involved and managers to collaboratively work through the situation in a more efficient and effective manner.
The second and more crucial solution is to ensure that you always have a succession plan. All entities should have at least two people with basic knowledge in regards to keeping track of the financial position and performance of the business. This was never more evident in this situation, in which the reliance on one person was ‘laid bare’ and the realisation that no one else was able to provide the required financial assistance.
We hear of this type of situation on a regular basis as we are sure you do. The period of time without a key person could potentially result in disaster for a small business or a whole lot of hard work for the business owner.
The transition to the cloud can be a relatively easy. We have assisted many clients to make the change to safe guard their business.
Please contact Mark or your Client Relationship Manager on (02) 9247 2227 to discuss your Plan B.